The Senate Just Banned Itself From Prediction Markets. A New Report Says Longshot Defense Bets on Polymarket Hit at 52 Percent. Almost Nobody Thinks the Ban Comes Close to Fixing It.
The big picture: A new report from the Anti-Corruption Data Collective found that on Polymarket, longshot bets tied to military and defense events succeed at a 52 percent rate, compared to 14 percent for longshots across the platform overall. Experts say a hit rate that high on long-odds defense bets is essentially statistically impossible without insider information. The Senate just unanimously banned its own members and staff from trading on prediction markets. BUT critics across the aisle say that ban handles maybe 1 percent of the people with access to the non-public information moving these markets.
Why it matters: Prediction markets are now multi-billion dollar venues where the underlying products being bet on include U.S. military operations, foreign policy outcomes, and the actions of federal officials. They sit in a legally murky space between gambling and securities trading. The question this year isn’t whether they can be reined in. It’s whether the rules look like sports betting, like equities, or like something genuinely new, and whether that gets decided before the insider-trading evidence becomes too obvious to ignore.
The Senate banned itself
A few days ago, the Senate passed a unanimous resolution banning members and staff from participating in prediction markets, full stop. The official rationale is the obvious one: insider trading concerns from people with access to non-public information about exactly the kinds of events these markets settle on. Wars. Sanctions. Confirmation votes. Cabinet picks.
Here’s the part that should tell you something. Both Kalshi and Polymarket immediately backed the resolution. Kalshi’s CEO called it “a great step to increase trust in our markets by making it an industry standard.” Polymarket said “codifying this into law is a step forward for the industry.” When the platforms taking the bets are this enthusiastic about lawmakers being banned from using them, read the room. The volume is somewhere else.
The 52% problem
That somewhere else is what last week’s Anti-Corruption Data Collective report tries to map. The group looked at “longshot” Polymarket bets, defined as wagers of $2,500 or more at odds below 35 percent. Across the platform, those longshots paid off about 14 percent of the time. Roughly what you’d expect.
BUT on political markets, the longshot success rate jumped to 25 percent. On bets tied to military or defense events specifically, the rate was 52 percent. You also don’t have to rely on statistics. Earlier this year, a U.S. special forces soldier was indicted for allegedly using insider information about the capture of Nicolás Maduro to win roughly $400,000 on Polymarket. Multiple outlets also flagged suspicious betting patterns around events in the Iran war.
The Senate’s ban handles, at most, the most visible end of this. The actual leak is somewhere broader. Executive branch. Intelligence community. Military. And anyone in those orbits who knows somebody with a Polymarket account.
Kalshi cleans house
Meanwhile, Kalshi, the U.S.-regulated prediction market, is trying to get ahead of the next wave. This morning the company rolled out new measures aimed at keeping minors off the platform: Face ID by default, selfie-based document verification, two-factor prompts, and a feature that lets users check whether someone else has logged in with their ID. The blog post explicitly references a bipartisan bill from Senators Kirsten Gillibrand and Dave McCormick that would ban federally elected politicians from prediction markets and beef up age verification.
The bigger fight is the age floor itself. The NBA, PGA, and NCAA have all been lobbying federal regulators to raise the minimum betting age, with the NBA and PGA wanting 21 across all sporting events. Kalshi’s CEO told Axios he wants 18 kept, arguing “most of the activity you see is healthy.” He also noted Kalshi is rolling out a tool called “Inner Circle” that lets you share your trading activity with friends and family. Sharing your gambling losses with your loved ones in real time. Cool. Cool cool cool.
Ban the people or ban the markets
You have two camps forming. On one side, the incremental approach: ban Congress, tighten age verification, add disclosures, punish individual cases as they pop up. Schumer is pushing here but wants the net wider, calling on the White House to sign a sweeping federal prohibition covering every executive branch staffer and singling out the West Wing as a “glaring conflict of interest.” Republican Senator Todd Young is co-sponsoring legislation to block all federally elected officials and government employees from using insider information on prediction contracts.
On the other side, Senator Chris Murphy is arguing the incremental approach can’t work in principle. His bill would ban entire categories of bets: wagers on government actions, terrorism, war, assassinations, or any event where someone could plausibly know or control the outcome. His argument is mathematical. Staff has inside information. White House staff has more. Their friends have it. Their friends’ friends have it. In his words, “you can’t fix this problem by banning people from trading. You can only fix this problem by banning the markets to begin with.”
You don’t have to agree with him to see the structural point.
By the numbers
52% - longshot success rate on Polymarket military/defense bets
25% - longshot success rate on political bets
14% - longshot success rate across the platform overall
$2,500 - threshold for a “longshot” wager in the ACDC report
$400,000 - amount a U.S. special forces soldier allegedly won on insider Maduro intel
0 - dissenting votes on the Senate’s self-imposed ban
The bottom line
The Senate banned itself, and the platforms cheered. That should tell you the people sitting at the actual leak aren’t on the Senate floor. The 52 percent number is the story here, and it’s not getting fixed by a resolution covering 535 people in a country where thousands more have access to the information moving these markets. Either the rules tighten on who can trade, or the rules tighten on what can be traded. Right now, neither is happening fast enough.
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